Mortgage Rates Bounced Lower Today

The bond and MBS markets lost some ground today, as mortgage rates bounced a little lower which is nothing unusual ahead of the employment report. Traders were taking profits and hedging against the data. I recommended locking in this morning's report. I am still bullish but not interested in blind trading.

There is not anything more I have to say this today. The employment report tomorrow is all markets are thinking about. The estimate is still for about 200K jobs and 240K private jobs. The unemployment rate is expected to remain the same. Two things that will shape the market reaction tomorrow - any revisions from February data and the average hourly earnings. Kind of like a standard estimate every month. Earnings have not shown any increase of consequence for years and are one component that can move markets if earnings are reported other than 0.2%. The stock market will be closed tomorrow along with other markets except the bond market at 11:00AM CST.

The Iran negotiations have ended for now. It is being hailed as the framework for agreement with Iran over its nuclear program as a "historic understanding," according to the President. It will lead to greater safety and security for the U.S. and its allies. It was a step but no real deal yet - the negotiations will resume in June where a final agreement is expected.

In summary, today was your last chance to lock before we get the non-farm payrolls report bright and early tomorrow morning. It could go either way. At this point ask yourself what would hurt you more - locking today and pricing improves or floating and pricing worsens. The safe move was to lock. Hope you all have a good night's rest.